Japan stocks slip, earnings and data worries weigh

(Adds details, stocks)

By Elaine Lies

TOKYO, April 8 (Reuters) - The Nikkei share average slipped 0.9 percent on Tuesday, a day after hitting a five-week closing high, with Tokyo Electron Ltd (8035.T) and other chip-related shares hurt by worries about their earnings. Investors kept to the sidelines ahead of Japanese machinery orders data due out on Thursday, with financials such as Mizuho Financial Group (8411.T) slipping on lingering credit fears. "By the end of this week especially there's likely to be a convergence of worries about both micro and macro factors, since it seems the machinery orders are going to be bad," said Tomomi Yamashita, a fund manager at Shinkin Asset Management.

"The economy is factored in to an extent, but worries about earnings remain."

The Nikkei .N225 shed 125.22 points to 13,325.01 by midday, while the broader TOPIX was down 0.9 percent at 1,294.25.

Japanese retailer earnings kicked off on Monday with Aeon Co Ltd (8267.T) posting its first profit fall in a decade on sluggish sales in Japan and at its struggling U.S. apparel unit, Talbots Inc (TLB.N). [ID:nT95282]

The company did forecast a recovery this year, though.

In lacklustre trade, investors were moving to lock in profits, with the yen's slight advance against the dollar JPY= weakening exporters like Canon Inc (7751.T), one of the top drags on the Nikkei.

"Optimism may have spread on Wall Street, but there's no question that investors here still are a bit wary about what the future holds," said Noritsugu Hirakawa, a strategist at Okasan Securities.

"After yesterday's rises and recent overall gains, investors are moving to lock in profits."

Investor hopes that the credit crisis may be easing were boosted on Wall Street by news that Washington Mutual Inc (WM.N) was close to securing a $5 billion investment. [ID:nN07475686]

CASHING IN CHIPS

Chip-related firms were battered by worry about their earnings, with Tokyo Electron down 3.8 percent at 6,110 yen. Advantest Corp (6857.T), which makes chip-testing equipment, slipped 3.8 percent to 2,785 yen.

Elpida Memory Inc (6665.T) tumbled 7.3 percent to 3,580 yen, a week after the computer memory chip maker said it aimed to raise prices 20 percent in April to reverse a brutal industrywide slump.

Financials slumped on lingering long-term worries about credit, with Nomura Holdings (8604.T) down 4.5 percent to 1,627 yen and No. 3 bank Sumitomo Mitsui Financial Group (8316.T) down